The defrauded banks include PNB, SBI, Union Bank, Syndicate Bank, IDBI Bank, HDFC, UCO, Union Bank of India and more
The Hush Post: Another bank fraud has come to light, this time from Chennai and involving 14 banks. The case is pertaining to jewellery chain Kanishk Gold which has managed to defraud 14 banks to the tune of Rs 824.15 crore.
On Wednesday, The Times of India reported that the State Bank of India had extended loans to the tune of Rs 215 crore, Punjab National Bank Rs 115 crore, Union Bank of India Rs 50 crore, Syndicate Bank Rs 50 crore, Bank of India Rs 45 crore, IDBI Bank Rs 45 crore, UCO Bank Rs 40 crore Tamilnad Mercantile Bank Rs 37 crore, Andhra Bank Rs 30 crore, Bank of Baroda Rs 30 crore, HDFC Bank Rs 25 crore, ICICI Bank Rs 25 crore, Central Bank of India Rs 20 crore and Corporation Bank Rs 20 crore to jewellery chain Kanishk Gold.
Initiating an action on the complaint of the State Bank of India, the Central Bureau of Investigation (CBI) has stated that while the principle loaned is about Rs 824 crore, adding the interest due would indicate a loss of more than Rs 1,000 crore.
According to the report, State Bank of India was the first to anticipate some issues with the loan and informed the same to the RBI on November 11, 2017. By January, the rest of the banks also informed the RBI about irregularities.
Kanishk has a registered office in and is promoted/owned by Bhoopesh Kumar Jain and his wife Neeta Jain. Despite repeated attempts bankers say that they were not able to contact the couple, who it seems has already fled and are residing in Mauritius. Despite the complaints, the CBI is yet to file an FIR in this regard. In a letter dated January 25, 2018 to the CBI, SBI has been quoted as saying that Kanishk “manipulated records, shut shop overnight.”
The first instance of interest default took place in March 2017 to eight member banks. By April 2017, the company stopped payments to all 14 banks. Bankers were unable to contact the promoters despite initiating stock audit on April 5, 2017. When the bankers decided to visit the offices of the company on May 25 2017, they found the facilities shut with no activity and stock.
Promoter Bhoopesh Jain meanwhile has written a letter to his bankers admitting falsification of records and removal of stocks. Madras Jewellers and Diamond Merchants Association said, “The company shut down as early as May 2017.”